Stephen A. Martin, Attorney at Law
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Using an HOA lien to collect unpaid dues

Homeowner associations serve a valuable purpose -- they keep neighborhoods beautiful, clean, safe places to live, as well as manage community funds. Unfortunately, there are many HOAs in Missouri and elsewhere that find themselves dealing with residents who refuse to pay their monthly or yearly dues. When this happens, HOA boards can take specific actions to seek payment. Filing an HOA lien against a resident homeowner is one option, though it is typically used as a last resort.

What does an HOA lien allow an HOA to do? If a resident fails to pay his or her dues after repeated requests, an HOA lien grants the association rights to the title of that resident's home. When the lien is due, the HOA then has the right to seize the property. With this type of lien in place, HOAs are given priority over other creditors, meaning, if other creditors have also placed liens on the property, the HOA will be the first to collect.

HOAs that wish to pursue liens need to know that there is a statute of limitations on foreclosure. The lien cannot be open-ended, as the state will only allow it to stay in place for so long. If the statute of limitations expires before the property is seized, the association will miss out on its chance to collect the funds owed to it. Various foreclosure restrictions do prevent the HOA from foreclosing soon after the lien has been approved, however. Homeowners must be given so much time to meet their debt obligations before they lose their homes.

Filing an HOA lien and following through on one can be quite the ordeal. Thankfully, it is not something HOAs in Missouri have to do alone. Legal counsel can help homeowner associations review all of their options for collecting past-due funds from residents and, if deemed necessary, assist with the lien process from filing to foreclosure.

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